Targeted Retirement Funds: Under The Hood

It’s not the fact that financial markets are not off to a good start. Markets struggling is not surprising, the fact that it is happening at this time of the year is surprising, because there are large inflows that ‘should’ve’ been supportive. Because of this, the professional market is frowning a bit.

For everyday people, the questions are “what risks do I have?” and “Does this affect my financial roadmap?”

First, some year-to-date results.

This is a very typical subset of Targeted Retirement Funds offered in 401(k) plans. These prices are as of the close, 02/08/2022.

Underneath the hood is a systematic process, broadly described here, and so the explanation below is an extreme simplification, because it only illustrates two asset classes, which we know to be untrue. However, these are the dominant bencharks (S&P 500 Index, Bond Market Index).